Noel Tata pushes for Tata Sons recast and Shapoorji funding ahead of crucial board meet on Nov 26

While the letters dated October 26 and October 29 highlight the continuing turbulence in the salt-to-semiconductor conglomerate, the despatches followed an attempted truce meeting between Noel and Chandrasekaran on October 25 in a bid to find a common ground.

Noel wants the board agenda on November 26 to include restructuring of Tata Sons to avoid stock market listing. Another issue he has flagged for the board to discuss immediately is that of Shapoorji Pallonji group's funding requirement of ₹25,000 crore through capital reduction. He stressed the need for deliberation and voting on some of the board agenda, according to a Business Standard report.

Last month, Tata Trusts advisor Farokh N Subedar had, in a media interaction, outlined the plan to merge two operating subsidiaries — Tata Electronic Systems Solutions and Tata Consulting Engineers into Tata Sons, as per the Business Standard report. The objective is to recast the asset profile of Tata Sons so that it's brought out of Reserve Bank of India's (RBI's) mandatory listing compliance required by any upper-layer non-banking financial company (NBFC) and core investment company (CIC).

The proposal was sent to the Tata Sons board as well as the RBI at that point. Noel's letter on October 29 stated that RBI's September 11 communication rejecting Tata Sons' application for deregistration as a CIC should be discussed at the next board meeting with a view to keep the holding company private. He has sought a presentation on Tata Sons restructuring at that meeting to drive home his point, to be followed by deliberation and decision.

Tata Trusts, the largest shareholder of Tata Sons — with a 66% stake — is opposed to listing of the holding company of the group. However, some trustees have supported listing of Tata Sons in the recent past. Shapoorji Pallonji group, the second largest shareholder, has maintained its support for listing of Tata Sons.

At the recent meeting between Noel and Chandrasekaran also, listing of Tata Sons had come up. It is learnt that Chandrasekaran said it was not in his control to keep the firm private as the RBI has mandated listing. On Chandrasekaran's third term once he completes his tenure in February 2027, Noel is learnt to have raised the issue of retirement age of 65 years for executive positions in the group.

Chandrasekaran, 63, reportedly mentioned that he was keen to follow the company policy but he needed to complete some crucial projects. The meeting was organised by a group of Tata old timers, it is learnt.

Neither Tata Trusts nor Tata Trustees commented on the meeting between Noel and Chandrasekaran. They declined to talk about the letters sent by Noel to the Tata Sons board. Sources said a director can ask for an agenda to be included in a Tata Sons board meeting with a notice of at least 15 days. Ahead of the Tata Sons board meeting, the board of Sir Dorabji Tata Trust (SDTT) — a core entity of Tata Trusts — is expected to meet on November 21, according to the Business Standard report.

Meanwhile, the Maharashtra Charity Commissioner, which froze the decision-making powers of Sir Ratan Tata Trust — the second largest shareholder of Tata Sons after SDTT — over alleged violation of some provisions of the Maharashtra Public Trust Act, may respond soon to Tata Trusts on governance matters.

Tata Trusts had recently sent its communication to the Charity Commissioner, following complaints made by certain trustees on governance issues.